Vermont Law School Disputes Royalton on Property Value

Royalton — A disagreement over a state law governing property values has prompted Vermont Law School to sue the town of Royalton in Windsor County Superior Court.

The dispute comes after town listers reassessed the building that houses the school’s Center for Legal Studies. The revaluation added about $20,000 to the property tax bill for the law school, which is in the midst of cutting its staff — and potentially its faculty — amid declining enrollment trends and changes in the legal field.

The school argues that the renovation should be categorized as improvements to an existing property, rather than new construction, as the town listers have defined it. Under the school’s interpretation of state law, the building’s value would be unchanged.

“It’s a matter of clarification to what (the state law) really means to all of Vermont,” said Lorraine Atwood, the school’s vice president of finance and administration.

The law in question reads that property values “shall not be increased so long as the property is owned and used by such institution for other than commercial and investment purposes, whether or not improvements have been made thereon.”

The school spent $3.5 million to aquire, renovate and expand the former Freck’s Store building — which sits at the main intersection in South Royalton at 190 Chelsea Street — in July 2009.

Restoration and renovation work on the building continued until last spring. For months, the former building was reduced to its exterior walls.

Frank Berk, the South Royalton attorney representing the town, said last week that there is a “second issue,” aside from the intepretation of whether the renovations are improvements or new construction, which is whether or not the building is used solely for educational purposes.

“It’s got the legal center, but downstairs it has a bookstore,” Berk said. “They sell books, they sell coffee and other commercial things.”

Royalton Selectboard member Peg Ainsworth agreed that the lawsuit was a matter of clarifying the language of the state law.

“It’s down to the terminology,” she said.

According to Royalton Lister Walter Hastings, the law school owes just under $100,000 in property taxes this year, including the disputed increase. The total is roughly a third of what it would pay if it were not an educational institution.

If the Chelsea Street building were assessed at its previous value, the law school would owe $76,100.

Timothy Connolly, of the Dinse, Knapp and McAndrew law firm based in Burlington, which is representing VLS, declined to discuss the lawsuit in detail.

“We like to let the filings speak for themselves,” he said.

Both Ainsworth and Atwood said the lawsuit has not had a negative impact on relations between the town and the school.

“It’s more a matter of just this one issue on what’s what,” said Ainsworth.

For her part, Atwood said that the school has always had a “working relationship” with the town.

“We often have lunch with the Selectboard, and we go out of our way to do a town report,” she said.

The Associated Press last week reported that the VLS class due to graduate in spring with juris doctor degrees is expected to drop by about 50 students in the next year, reflecting a nationwide trend of declining enrollment in law school due to a dwindling number of entry-level legal jobs.

VLS reported that 139 of the school’s 174 graduates in 2011 have since found employment, 110 of those in long-term, full-time jobs.

The new building on Chelsea Street was evacuated last month after allergy-like symptoms were experienced by students and employees, but a recent air quality test revealed dust as the only culprit.

Now that the dust has settled, school officials said the building will be cleaned this week, and should be reoccupied shortly thereafter.